As Colombian Oil Money Flowed To Clintons, State Department Took No Action To Prevent Labor Violations

Former U.S. Secretary of State Hillary Clinton in Washington March 23, 2015. Photo: REUTERS/Joshua Roberts

Former U.S. Secretary of State Hillary Clinton in Washington, March 23, 2015 Photo: Reuters/Joshua Roberts

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For union organizers in Colombia, the dangers of their trade were intensifying. When workers at the country’s largest independent oil company staged a strike in 2011, the Colombian military rounded them up at gunpoint and threatened violence if they failed to disband, according to human rights organizations. Similar intimidation tactics against the workers, say labor leaders, amounted to an everyday feature of life.

For the United States, these were precisely the sorts of discomfiting accounts that were supposed to be prevented in Colombia under a labor agreement that accompanied a recently signed free trade pact liberalizing the exchange of goods between the countries. From Washington to Bogota, leaders had promoted the pact as a win for all -- a deal that would at once boost trade while strengthening the rights of embattled Colombian labor organizers. That formulation had previously drawn skepticism from many prominent Democrats, among them Hillary Clinton.

Yet as union leaders and human rights activists conveyed these harrowing reports of violence to then-Secretary of State Clinton in late 2011, urging her to pressure the Colombian government to protect labor organizers, she responded first with silence, these organizers say. The State Department publicly praised Colombia’s progress on human rights, thereby permitting hundreds of millions of dollars in U.S. aid to flow to the same Colombian military that labor activists say helped intimidate workers.

At the same time that Clinton's State Department was lauding Colombia’s human rights record, her family was forging a financial relationship with Pacific Rubiales, the sprawling Canadian petroleum company at the center of Colombia’s labor strife. The Clintons were also developing commercial ties with the oil giant’s founder, Canadian financier Frank Giustra, who now occupies a seat on the board of the Clinton Foundation, the family’s global philanthropic empire.

The details of these financial dealings remain murky, but this much is clear: After millions of dollars were pledged by the oil company to the Clinton Foundation -- supplemented by millionsmore from Giustra himself -- Secretary Clinton abruptly changed her position on the controversial U.S.-Colombia trade pact. Having opposed the deal as a bad one for labor rights back when she was a presidential candidate in 2008, she now promoted it, calling it “strongly in the interests of both Colombia and the United States.” The change of heart by Clinton and other Democratic leaders enabled congressional passage of a Colombia trade deal that experts say delivered big benefits to foreign investors like Giustra.

The Clinton Foundation, Giustra and the State Department did not respond to International Business Times' requests for comment. Pacific Rubiales has denied that it has engaged in any violence toward union organizers.

As Hillary Clinton readies a national apparatus for her likely presidential campaign -- one that will surely depend upon the support of American labor unions -- her family’s relationship with Giustra and Pacific Rubiales, her reversal on the Colombia trade pact and her subsequent move to bless Colombia’s human rights record complicate her efforts to present herself as a champion of worker rights.

These issues were amplified this week when the AFL-CIO cited persistent violence against Colombian union organizers in its push to block a new 12-nation trade deal that Clinton has championed.

Blurred Lines?

The details of her family’s entanglements in Colombia echo talk that the Clintons have blurred the lines between their private business and philanthropic interests and those of the nation. And Hillary Clinton’s connections to Pacific Rubiales and Giustra intensify recent questions about whether big donations influenced her decisions as secretary of state.

“Giustra’s donations create the problem that it could be difficult for the public to have confidence that Clinton’s certifications of Colombia’s labor rights record were made on the merit and without bias or partiality,” said Kathleen Clark, a law professor at Washington University in St. Louis and a national expert on ethics in government. “Public officials need to know that even feelings of gratitude are an inappropriate influence.”

The Clintons’ financial relationship with Giustra “could undermine the public’s confidence in [Hillary’s] decisions,” Clark said, particularly in a case that involves certifying the human- and labor-rights record of a country where Clinton’s own State Department has admitted that “violence, threats, harassment, and other practices against trade unionists continued.”

“It would be one thing if it was the secretary certifying that Finland is complying with human rights standards,” Clark said. “But Colombia?”

That war-torn South American country has long been at the center of the relationship between the Clintons, Giustra and Pacific Rubiales.

Giustra and Bill Clinton reportedly first met in 2005, at a fundraiser for tsunami victims held at Giustra’s home in Canada. They quickly became jet-settingfriends. That year, as Giustra was on his way to becoming one of the Clinton Foundation’s largest individual donors, an aide to Bill Clinton arranged an introduction between Giustra and the then-president of Colombia, Alvaro Uribe, the Wall Street Journal reported. After the meeting, Uribe moved to begin privatizing his country’s state-owned oil company, Ecopetrol. Pacific Rubiales soon expanded its operations in Colombia inpartnershipwith Ecopetrol, which was still being overseen by Uribe.

Giustra was at the time developing deep ties to Pacific Rubiales, seeding the firm with capital, according to CEO.ca. Other ties to the company remain: CEO.ca reports that Giustra is today a co-investor with Pacific Rubiales’ executive director in a separate firm called Blue Pacific that has done businesswith the oil company. Giustra also serves on the board of Endeavour Mining, after a stint as that company’s chairman. According to Endeavour documents, the conglomerate has advised and held equity stakes in Pacific Rubiales, and two of Giustra’s fellow Endeavour board members (including its CEO, who has donated at least $50,000 to the Clinton Foundation) simultaneously serve on Pacific Rubiales’ board. Giustra is listed as the founder of Pacific Rubiales on Endeavour’s website, and Toronto's Globe and Mail newspaper has called Pacific Rubiales a “Giustra-connected shell company.”

Giustra’s connections to Pacific Rubiales proved fruitful for the Clintons when in 2007 the oil giant became one of the first donors to a venture between Giustra and Bill Clinton. In a Pacific Rubiales news release quoting Giustra, the company announced that it was joining with its financial backers to give $4.4 million to the Clinton Giustra Enterprise Partnership (CGEP).

Incorporated in Canada as a “charitable business,” CGEP says it seeks to “generate both social impact and financial returns” for investors. A majority of CGEP’s partners have connections to oil and mining industries in Colombia. Two partners have major business interests in Colombia’s palm oil industry, which human rights groups say is in part responsible for the world’s second-largest internal refugee population, after Syria.

According to its website, the CGEP’s mission is to address “market gaps in developing country supply or distribution chains.” One of its larger projects has been to train young workers for jobs in “tourism, health care and port logistics” in Cartagena, Colombia, where the Giustra-connected company Blue Pacific owns a port that was under construction as of 2013, World Bank documents show.

Potential Complication

As Giustra continued expanding his businesses in Colombia, one potential complication for Colombian investors was the prospect of Democrats nixing a proposed U.S.-Colombia Free Trade Agreement. During the 2008 presidential campaign, both Barack Obama and Hillary Clinton declared their unequivocal opposition to the deal, with the latter saying there should be “no trade deal with Colombia while violence against trade unionists continues in that country.” She pledged that year to “do everything I can to urge the Congress to reject the Colombia Free Trade Agreement."

Yet within a year of becoming secretary of state, Clinton visited Colombia, saying she was there to “underscore President Obama's and my commitment to the Free Trade Agreement.” (Obama had also changed his position on the pact.) In a 2010 interview with RCN Television, Clinton declared that she and Obama were set “to begin a very intensive effort to try to obtain the [congressional] votes to get the Free Trade Agreement finally ratified."

Federal lawmakers ratified the pact in October2011. Only weeks later, AFL-CIO President Richard Trumka sent a letter to the Obama administration citing allegations of violence at Pacific Rubiales.

In December of the same year, Clinton publicly thanked Giustra for his work when she gave the keynote address at the Giustra-backed International Crisis Group’s annual "In Pursuit of Peace" award dinner. In early 2012, CGEP was the main beneficiary of Pacific Rubiales’ golf tournament in Bogota, which raised $1 million for the Clinton-Giustra venture. Then in April 2012, the Obama administration certified Colombia as respecting labor rights, cementing the trade pact into law. That certification came at the 2012 Summit of the Americas, where Clinton met the Colombian minister of mining -- Pacific Rubiales’ primary regulator in Colombia.

The agreement, Melinda St. Louis of Public Citizen says, was a big boost to investors like Giustra. While it did not specifically promote oil exports, it gave investors new privileges under Colombian law -- the kind that St. Louis says particularly favor major energy companies like Giustra’s, regardless of the fact that he is Canadian.

"The U.S.-Colombia FTA had an investment chapter that granted extreme investor rights, and they certainly go well beyond U.S. law in regard to property rights," St. Louis told IBTimes. She said the deal empowers corporations -- and in particular natural resource corporations -- to try to use international tribunals to override local opposition to their agenda.

Though Clinton has never explicitly explained her change of position on the U.S.-Colombia trade pact, she acknowledged “concerns” about Colombian “human rights abuses, violence against labor organizers, targeted assassinations, and the atrocities of right-wing paramilitary groups” in her 2014 book, “Hard Choices.” But, she asserted, “By the time I visited Bogota in June 2010, violence was down dramatically.” She said that she met up with her husband while he “was traveling through Colombia on Clinton Foundation business” and the couple “went out for dinner with friends and staff at a local steakhouse, and toasted Colombia's progress.”

Human Rights Watch reported that in the same year Clinton visited Bogota, “threats against unionists -- mostly attributed to paramilitaries' successor groups -- have increased since 2007” and that “impunity in such cases is widespread.” The Colombian human rights group PASO International reported that in 2011, Pacific Rubiales “workers were forced off picket lines at gunpoint by members of the Armed Forces during [a] strike and only allowed to return to work when they had renounced the union.” In 2012, a Colombian journalist covering protests against Pacific Rubiales died after being detained by the police. A year later, a report from two Democratic members of the Congressional Monitoring Group on Labor Rights in Colombia found “murders and threats against union members and harmful subcontracting persist in Colombia largely unabated.”

In an effort to blunt unions’ criticism of the Colombia agreement during Clinton’s push for congressional ratification, her State Department specifically touted an accompanying Labor Action Plan that mandated that the Colombian government enforce its own labor laws and crack down on anti-union activities by employers and right-wing paramilitary forces. That deal was in addition to separate congressional legislation making U.S. foreign and military aid to Colombia contingent on the secretary of state certifying that the country was respecting labor and human rights.

Union activists in Colombia say that even though they were disappointed by the passage of the trade agreement, they hoped Clinton’s State Department would hold Colombia to the promises it made in the Labor Action Plan and consequently end alleged anti-union hostility at Pacific Rubiales.

Trumka’s letter to the Obama administration (about reports of union-sympathizing Pacific Rubiales workers facing violence) specifically asked the administration to take action under the Labor Action Plan. That call was echoed by congressional lawmakers in a 2012 letter to the Colombian minister of labor -- copied to Clinton -- detailing how a strike at Pacific Rubiales was broken with the help of the Colombian military and how Pacific Rubiales engaged in mass firings of workers sympathetic to the labor organizing.

The United Steelworkers union and the nonprofit Washington Office on Latin America (WOLA) also repeatedlycontacted the State Department in 2011 and 2012, asking Clinton to use her clout under the action plan -- and her power to withhold certification for Colombian military aid -- as a way to bring pressure on Pacific Rubiales. In a letter to Clinton, Steelworkers President Leo Gerard asked the secretary to “take all possible measures to ensure that the Colombian government ensures the safety and well-being of the threatened USO unionists” at Giustra’s company. USO is the abbreviation for the petroleum workers union, formally known as La Unión Sindical Obrera de la Industria del Petróleo.

No Criticism, No Action

But an IBTimes review of public State Department documents shows that as the Giustra-Clinton foundation relationship deepened, Hillary Clinton and the State Department never criticized or took action against the Colombian government for alleged violations of labor rights at Pacific Rubiales. Instead, Clinton’s State Department issued certifications in 2009, 2010, 2011 and 2012 declaring that Colombia has been complying with human rights standards that are required under federal law for continued U.S. military aid to the country.

“The Colombian government continued to make progress on improving respect for human rights, both within the Armed Forces and in Colombia at large,” the State Department declared in 2012, despite the allegations of collusion between the Colombian military and Pacific Rubiales to intimidate workers. By that time, Pacific Rubiales and its international financial partners had committed $4.4 million to the Clinton Foundation’s initiative with Giustra, and Giustra had pledged to donate more than $100 million to the joint venture.

The State Department’s 2012 declaration, published just a few months after Bill Clinton golfed with Pacific Rubiales’ president at the company’s golf tournament, also asserted that the Colombian “government generally continued to respect and recognize the important role of human rights defenders.”

Some of those human rights watchdog groups reject that assertion.

"Since 2011, WOLA has continuously informed the U.S. Congress, State Department, Department of Labor and USTR [U.S. Trade Representative] of grave labor violations committed against the USO labor union in the camps of Pacific Rubiales,” said Gimena Sanchez, a program officer at WOLA. “Despite the existence of the U.S.-Colombia Labor Action Plan, our concerns have not been addressed. Pacific Rubiales continues to violate the labor rights of its workers and it impedes independent union affiliation. Colombian and U.S. authorities are doing little to stop it.”

Pacific Rubiales has denied the chargesin the past and did so again this week in response to an IBTimes query about the matter.

"Pacific Rubiales is a company that fully respects the rights of its workers and demands from the companies that provide services to it to also do so, both in Colombia as well as in all of the countries in which it operates," Peter Volk, general counsel of Pacific Rubiales, said. "In 2013 the Colombian Ministry of Labor absolved Pacific of all charges, after verifying that Pacific Rubiales had not engaged in any conduct that violated the USO’s right to associate. It is very important to note that not one of Pacific’s employees has been or is affiliated with the USO (in Colombia, workers can affiliate to any union they wish, on an individual basis); and for this reason the USO is not a legitimate representative of the company’s workers."

Volk declined to tell IBTimes the total amount Pacific Rubiales contributed to the Clinton Foundation or to the CGEP.

Nevertheless, labor organizers say the lack of intervention by Clinton’s State Department has allowed violations of labor rights at Pacific Rubiales to continue. They also argue that Clinton’s certification of Colombia’s human rights record led to the delivery of more resources to a Colombian military that has been critical to Pacific Rubiales business prospects. In the areas where Pacific Rubiales extracts oil, around 80 percent of governmental security work is devoted to protecting oil pipelines and oil industry assets, according to Neil Martin, the Colombia-based executive director of PASO International.

“We have not seen any evidence of real intention on the part of Colombian or American authorities to address attacks against workers or enforce new regulations,” Martin told IBTimes. “Nothing they have done has had an impact on the ground."